Starbucks (SBUX) Last Update 5/2/24
% of Stock Price
Gross Profits
Free Cash Flow
Licensed Stores
Net Debt
10.7% $9.64
Trefis Price
Top Drivers for Period
Key Drivers
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TREFIS Analysis

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Starbucks Company


  1. Company Operated Stores constitute 58% of the Trefis price estimate for Starbucks's stock.
  2. Licensed Stores constitute 32% of the Trefis price estimate for Starbucks's stock.
  3. CPG, Food Service & Other constitutes 10% of the Trefis price estimate for Starbucks's stock.


Starbucks' Q1 Snapshot

The company's total revenue increased 7.9% during the quarter to $9.4 billion. EPS was reported at $0.90 vs $0.74 a year ago. The Coffee King reported that comparable sales in North America increased 5% in Q1, driven by a 4% increase in average tickets and a 1% rise in comparable transactions. International comparable sales rose 7% during the quarter. China's comparable store sales increased 10%. The company's consolidated non-GAAP operating margin rose by 130 basis points from a year ago to 15.8% of sales. Starbucks opened 549 net new stores during the quarter. The coffee chain ended the period with a record store count globally of 38,587 stores, of which 51% were company-operated and 49% were licensed. The business now has 34.3 million 90-day active rewards members in the U.S., up 13% y-o-y.

Note: Starbucks FY'23 ended on October 1, 2023. Q1'24 refers to the quarter that ended on December 31, 2023

FY 2024 Guidance

The company guided for full-year FY 2024 revenue growth in the range of +7% to +10% vs. a prior expectation for the low end of a +10% to +12% range. Full-year global and U.S. comparable sales growth are forecast to be up 4% to 6% vs. a prior estimate of +5% to +7%. The company held its prior EPS growth and global store growth guidance in check, which means the consensus estimate for full-year EPS of $4.10 is very much in play.


Starbucks is the world's leading roaster and retailer of specialty coffee. Through its global network of owned and franchised coffee retail outlets, Starbucks offers a wide range of products like high-quality whole bean coffees, freshly brewed coffees, Italian-style espresso beverages, cold blended beverages, food items like sandwiches, premium teas, and coffee-making equipment.

Starbucks' stores are located near offices and residential areas. They are larger, compared to its licensed stores which are much smaller and mostly located at airports and supermarkets.

Starbucks also sells its packaged coffee and tea through retail channels such as grocery stores, warehouse clubs, convenience stores, and US food service accounts.


The Company-Operated Stores division is more valuable than the Franchise Stores division for Starbucks for the following two reasons:

Company-operated stores generate more revenues than franchised stores

Starbucks makes money through its company-owned stores as well as through franchise fees and royalties from franchised stores. Starbucks earns higher profit margins from franchised stores compared to company-owned stores because there are no operational and employee costs involved with franchised stores, hence Starbucks gets to keep the entire royalty & rent fee without paying for any costs.

Revenues earned from Starbucks' company-owned stores are much higher than the franchised stores. This is because, although there are costs involved, Starbucks owns 100% of the revenues from its restaurants, while it gets a percentage of the revenues (in the form of royalty fees) from its franchised restaurants.

Number of company-owned stores comparable to franchised stores

Food & beverage companies, in general, increase their reach and profits by having a large base of franchised stores. For example, McDonald's has four times more franchised restaurants than company-owned restaurants, making the franchise business more valuable to its stock. However, Starbucks has almost an equal number of company-owned stores and franchised stores. In FY 23, Starbucks had 19,592 company-owned stores and 18,446 franchised stores making a total of 38,038 stores.


Growth in China

China remains a long-term growth driver for the company, as its GDP, is projected to grow from around $18 trillion in 2023 to nearly $28 trillion by 2027 - likely driven by a massive increase in its middle class. Moreover, the per capita coffee consumption in China is about one-half of one cup per person per year compared to approximately 300 cups per person per year in the U.S. While consumption levels in China may never be able to match those in the U.S., even attaining a small fraction of it will benefit the company immensely.

International expansion fueling growth

Most new restaurants the company plans to open are in China/Asia Pacific. The number of Starbucks outlets in these countries is still much less than the number in the U.S. New outlets opened will be a mix of company-operated and franchised restaurants.

Focus On Drive-Thrus

SBUX intends to open a majority of its new U.S. restaurants in middle America and the South, with over 80% of stores built in the year being drive-thrus. The company states that its research has indicated significant opportunities for store expansion in higher-growth, and lower-cost markets, particularly when considering rising wages and occupancy costs.